Delgrosso v. Spang and Co.; DiFrancesco and Racz v. Spang and Co.

Summary

The United States District Court for the Western District of Pennsylvania considers plaintiffs' motion to distribute surplus assets from the Pension Plan of the Ferroslag Division of Spang and Company. The court holds that, pursuant to the Third Circuit's prior decision and ERISA, an independent plan administrator may terminate the plan despite Spang's objection, and directs that an independent administrator be appointed. The court also concludes that Spang must pay the administrator's expenses because of its contractual obligation and substantial breach of fiduciary duties.

Holdings

1. An independent plan administrator may terminate the pension plan despite Spang's opposition and despite the plan provision purporting to give Spang sole and absolute authority to terminate the plan.
2. The 1986 amendments to 29 U.S.C. § 1341 did not overturn or eliminate an independent plan administrator's authority to terminate a plan over the employer's objection.
3. Spang could not continue as plan administrator because its substantial breach of fiduciary duties justified replacing it with an independent administrator.
4. Spang was required to pay the administrative expenses incurred by the independent plan administrator.

Questions Presented

1. Whether an independent plan administrator may terminate an ERISA pension plan despite the plan sponsor's opposition and a plan provision granting the sponsor sole authority to terminate the plan.
2. Whether the 1986 amendments to ERISA section 1341 eliminated or restricted the plan administrator's authority to terminate a single-employer pension plan.
3. Whether Spang could remain plan administrator after substantially breaching its fiduciary duties by amending the plan to permit reversion of surplus assets to itself.
4. Whether Spang was required to pay the administrative expenses incurred by the independent plan administrator.

Disposition

other